Fourth Quarter 2023:
Full Year 2023:
* Refers to financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP); definitions of non-GAAP measures and reconciliations to their closest GAAP measures can be found in this news release under the heading Comment on Regulation G and Non-GAAP Financial Measures. † Net premiums written on a comparable basis reflects year-over-year comparison on a constant dollar basis adjusted for the International lag elimination, the sale of Crop Risk Services (CRS) and the sale of Validus Re. Refer to page 18 for more detail.
NEW YORK--(BUSINESS WIRE)-- American International Group, Inc. (NYSE: AIG) today reported financial results for the fourth quarter and full year ended December 31, 2023.
AIG Chairman & Chief Executive Officer Peter Zaffino said: “In 2023, AIG delivered outstanding financial results, highlighted by excellent underwriting performance and the successful execution of multiple complex initiatives, while delivering exceptional value for our clients and stakeholders. Our substantial progress reflects the dedication and teamwork of our AIG colleagues around the world, who have delivered on our objectives. The full year adjusted after-tax income per diluted share increased 33% from the prior year to $6.79. We have further repositioned AIG for the future with the divestitures of Validus Re and Crop Risk Services, and we enter 2024 with significant momentum.
“General Insurance delivered $2.3 billion of underwriting income in 2023, a 15% increase year-over-year. Our unwavering commitment to underwriting excellence and ability to manage volatility remain fundamental to the sustainability of AIG’s underwriting income growth. The full-year 2023 combined ratio of 90.6% represents an improvement of 130 basis points year-over-year. Accident year combined ratio, as adjusted, of 87.7% represents an improvement of 100 basis points year-over-year. 2023 margins and underwriting income were the best results achieved in recent history. The quality of the underwriting portfolio once again enabled exceptional success at January 1 in renewing our reinsurance placements.
“For the full-year 2023, General Insurance net premiums written increased 5% year-over-year, or 7% on a comparable basis†, driven by 5% growth in Commercial Lines led by 17% growth in Lexington and 10% in Global Specialty. For the fourth quarter, North America Commercial Lines pricing, which includes rate and exposure, increased 7% and remains ahead of loss cost trend. Global Commercial pricing increased 6% and was in-line with loss cost trend.
“Life & Retirement continued to deliver strong financial results, benefiting from continued spread expansion and strong sales with total premiums and deposits exceeding $40 billion for the full year. Base net investment income continued to see favorable outcomes from the higher interest rate environment and, for the full-year 2023, Individual and Group Retirement produced a 46 basis point expansion in base spread year-over-year.
“With three successful secondary offerings in 2023, we reduced AIG’s ownership in Corebridge to approximately 52% at year end. We expect to deconsolidate Corebridge in 2024, which will bring greater visibility into our business, capital structure and operations.
“AIG’s strong performance and strategic actions in 2023 supported our sustained and balanced capital management strategy. We maintained financial flexibility while reducing financial debt by $1.4 billion and returning approximately $4 billion to AIG shareholders through $3 billion of common stock repurchases and $1 billion of dividends, including a 12.5% increase in the common stock dividend in the second quarter of 2023.
“We have significant momentum as we enter 2024, and excellent underwriting, operations, claims service, and talent are what will drive AIG’s continued growth. As we continue to navigate an increasingly complex global risk environment, we will remain agile and disciplined while delivering sustainable and differentiated value to our customers, partners and stakeholders.”
For full year 2023, net income attributable to AIG common shareholders was $3.6 billion, or $4.98 per diluted common share, compared to $10.2 billion, or $12.94 per diluted common share, in the prior year. The decline was primarily driven by net realized losses largely related to Fortitude Re funds withheld embedded derivative at Life and Retirement (L&R) compared to gains in the prior year, as well as derivative activity.
AATI was $4.9 billion, or $6.79 per diluted common share, for the full year of 2023 compared to $4.0 billion, or $5.12 per diluted common share, in the prior year. The increase in AATI was due to higher underwriting income and net investment income in General Insurance. While L&R APTI rose 15% in 2023, Corebridge’s earnings included in AATI decreased 20% due to the reduction in AIG ownership from 77.7% at the beginning of the year to 52.2% at December 31, 2023.
For the fourth quarter of 2023, net income attributable to AIG common shareholders was $86 million, or $0.12 per diluted common share, compared to $545 million, or $0.72 per diluted common share, in the prior year quarter. The decline was primarily driven by higher net realized losses on Fortitude Re funds withheld embedded derivative.
AATI was $1.3 billion, or $1.79 per diluted common share, for the fourth quarter of 2023 compared to $1.1 billion, or $1.39 per diluted common share, in the prior year quarter. The increase in AATI was driven by higher net investment income in General Insurance. Corebridge’s earnings included in AATI decreased about 25% due to the reduction in AIG ownership.
Total net investment income for the fourth quarter of 2023 was $3.9 billion, an increase of 21% from $3.3 billion in the prior year quarter, primarily driven by higher income from fixed maturity securities and loans due to higher reinvestment rates, partially offset by lower returns on alternative investments. Total net investment income on an APTI basis* was $3.5 billion, an increase of $499 million from the prior year quarter, reflecting the same trends.
Book value per common share was $65.14 as of December 31, 2023, an increase of 16% from September 30, 2023 and an increase of 18% from December 31, 2022, both primarily driven by a decrease in accumulated other comprehensive loss (AOCL) and the impact of share repurchases. Adjusted book value per common share* was $76.65, a decrease of 2% from September 30, 2023, primarily driven by the impact of Corebridge secondary offerings, and an increase of 1% from December 31, 2022, reflecting net impact of income, dividends, share repurchases and Corebridge secondary offerings.
In the fourth quarter of 2023, AIG repurchased $1.0 billion of common stock, or approximately 16 million shares, paid $256 million of common and preferred dividends and repurchased $1.6 billion aggregate principal amount of debt. AIG parent liquidity was $7.6 billion as of December 31, 2023, up $4.0 billion from September 30, 2023, which includes insurance subsidiary dividends and proceeds from Corebridge secondary offerings and the sale of Validus Re. Total debt and preferred stock to total capital ratio at December 31, 2023 was 28.5%, down from 33.7% at September 30, 2023, primarily driven by a decrease in AOCL. Excluding AOCL adjusted for cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, total debt and preferred stock to total capital ratio* was 24.3% at December 31, 2023, down from 25.9% at September 30, 2023.
On February 13, 2024, the AIG Board of Directors declared a quarterly cash dividend on AIG common stock of $0.36 per share. The dividend is payable on March 28, 2024 to stockholders of record at the close of business on March 14, 2024.
The AIG Board of Directors also declared a quarterly cash dividend of $365.625 per share on AIG Series A 5.85% Non-Cumulative Perpetual Preferred Stock (Series A Preferred Stock), with a liquidation preference of $25,000 per share, which is represented by depositary shares (NYSE: AIG PRA), each representing a 1/1,000th interest in a share of preferred stock. Holders of depositary shares will receive $0.365625 per depositary share. The dividend is payable on March 15, 2024 to holders of record at the close of business on February 29, 2024.
On January 31, 2024, AIG announced that it will redeem all of the 20,000 outstanding shares of Series A Preferred Stock and all 20,000,000 of the corresponding depositary shares on March 15, 2024. The redemption price per share of Series A Preferred Stock will be $25,000 (equivalent to $25.00 per depositary share).
FINANCIAL SUMMARY
| Three Months Ended December 31, |
|
| Twelve Months Ended December 31, | |||||||||||
($ in millions, except per common share amounts) | 2022 |
| 2023 |
|
|
| 2022 |
|
| 2023 |
| ||||
Net income attributable to AIG common shareholders | $ | 545 |
| $ | 86 |
|
| $ | 10,198 |
| $ | 3,614 |
| ||
Net income per diluted share attributable to AIG common shareholders | $ | 0.72 |
| $ | 0.12 |
|
| $ | 12.94 |
| $ | 4.98 |
| ||
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted pre-tax income (loss) | $ | 1,613 |
| $ | 1,995 |
|
| $ | 5,800 |
| $ | 7,401 |
| ||
General Insurance |
| 1,212 |
|
| 1,437 |
|
|
| 4,430 |
|
| 5,371 |
| ||
Life and Retirement |
| 852 |
|
| 957 |
|
|
| 3,317 |
|
| 3,805 |
| ||
Other Operations |
| (451 | ) |
| (399 | ) |
|
| (1,947 | ) |
| (1,775 | ) | ||
|
|
|
|
|
|
|
|
|
| ||||||
Net investment income | $ | 3,258 |
| $ | 3,932 |
|
| $ | 11,767 |
| $ | 14,592 |
| ||
Net investment income, APTI basis |
| 2,960 |
|
| 3,459 |
|
|
| 10,997 |
|
| 13,094 |
| ||
|
|
|
|
|
|
|
|
|
| ||||||
Adjusted after-tax income attributable to AIG common shareholders | $ | 1,053 |
| $ | 1,270 |
|
| $ | 4,036 |
| $ | 4,921 |
| ||
Adjusted after-tax income per diluted share attributable to AIG common shareholders | $ | 1.39 |
| $ | 1.79 |
|
| $ | 5.12 |
| $ | 6.79 |
| ||
|
|
|
|
|
|
|
|
|
| ||||||
Weighted average common shares outstanding - diluted (in millions) |
| 754.9 |
|
| 708.0 |
|
|
| 787.9 |
|
| 725.2 |
| ||
|
|
|
|
|
|
|
|
|
| ||||||
Return on common equity |
| 5.5 | % |
| 0.8 | % |
|
| 20.7 | % | 8.6 | % | |||
Adjusted return on common equity |
| 7.5 | % |
| 9.4 | % |
|
| 7.1 | % | 9.0 | % | |||
|
|
|
|
|
|
|
|
|
| ||||||
Book value per common share | $ | 55.15 |
| $ | 65.14 |
|
| $ | 55.15 |
| $ | 65.14 |
| ||
Adjusted book value per common share | $ | 75.90 |
| $ | 76.65 |
|
| $ | 75.90 |
| $ | 76.65 |
| ||
|
|
|
|
|
|
|
|
|
| ||||||
Common shares outstanding (in millions) |
| 734.1 |
|
| 688.8 |
|
|
| 734.1 |
|
| 688.8 |
|
GENERAL INSURANCE
|
| Three Months Ended December 31, |
|
| |||||||||
($ in millions) |
| 2022 |
| 2023 | Change | ||||||||
Gross premiums written | $ | 7,594 |
|
| $ | 7,631 |
|
| — |
| % | ||
|
|
|
|
|
|
|
|
| |||||
Net premiums written | $ | 5,610 |
|
| $ | 5,755 |
|
| 3 |
| % | ||
North America |
| 2,674 |
|
|
| 2,660 |
|
| (1 | ) |
| ||
North America Commercial Lines |
| 2,272 |
|
|
| 2,111 |
|
| (7 | ) |
| ||
North America Personal Insurance |
| 402 |
|
|
| 549 |
|
| 37 |
|
| ||
International |
| 2,936 |
|
|
| 3,095 |
|
| 5 |
|
| ||
International Commercial Lines |
| 1,763 |
|
|
| 1,911 |
|
| 8 |
|
| ||
International Personal Insurance |
| 1,173 |
|
|
| 1,184 |
|
| 1 |
|
| ||
|
|
|
|
|
|
|
|
| |||||
Underwriting income (loss) | $ | 635 |
|
| $ | 642 |
|
| 1 |
| % | ||
North America |
| 425 |
|
|
| 321 |
|
| (24 | ) |
| ||
North America Commercial Lines |
| 435 |
|
|
| 329 |
|
| (24 | ) |
| ||
North America Personal Insurance |
| (10 | ) |
|
| (8 | ) |
| 20 |
|
| ||
International |
| 210 |
|
|
| 321 |
|
| 53 |
|
| ||
International Commercial Lines |
| 196 |
|
|
| 292 |
|
| 49 |
|
| ||
International Personal Insurance |
| 14 |
|
|
| 29 |
|
| 107 |
|
| ||
|
|
|
|
|
|
|
|
| |||||
Net investment income, APTI basis | $ | 577 |
|
| $ | 795 |
|
| 38 |
| % | ||
Adjusted pre-tax income | $ | 1,212 |
|
| $ | 1,437 |
|
| 19 |
| % | ||
Return on adjusted segment common equity |
| 10.8 |
| % |
| 13.5 |
| % | 2.7 |
| pts | ||
|
|
|
|
|
|
|
|
| |||||
Underwriting ratios: |
|
|
|
|
|
|
|
| |||||
North America Combined Ratio (CR) |
| 86.6 |
|
|
| 87.9 |
|
| 1.3 |
| pts | ||
North America Commercial Lines CR |
| 84.4 |
|
|
| 85.1 |
|
| 0.7 |
|
| ||
North America Personal Insurance CR |
| 102.5 |
|
|
| 101.8 |
|
| (0.7 | ) |
| ||
International CR |
| 93.2 |
|
|
| 90.1 |
|
| (3.1 | ) |
| ||
International Commercial Lines CR |
| 89.4 |
|
|
| 85.5 |
|
| (3.9 | ) |
| ||
International Personal Insurance CR |
| 98.9 |
|
|
| 97.7 |
|
| (1.2 | ) |
| ||
General Insurance (GI) CR |
| 89.9 |
|
|
| 89.1 |
|
| (0.8 | ) |
| ||
|
|
|
|
|
|
|
|
| |||||
GI Loss ratio |
| 58.5 |
|
|
| 56.5 |
|
| (2.0 | ) | pts | ||
Less: impact on loss ratio |
|
|
|
|
|
|
|
| |||||
Catastrophe losses and reinstatement premiums |
| (3.8 | ) |
|
| (2.1 | ) |
| 1.7 |
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| 2.3 |
|
|
| 0.9 |
|
| (1.4 | ) |
| ||
GI Accident year loss ratio, as adjusted |
| 57.0 |
|
|
| 55.3 |
|
| (1.7 | ) |
| ||
GI Expense ratio |
| 31.4 |
|
|
| 32.6 |
|
| 1.2 |
|
| ||
GI Accident year combined ratio, as adjusted |
| 88.4 |
|
|
| 87.9 |
|
| (0.5 | ) |
| ||
|
|
|
|
|
|
|
|
| |||||
Accident year combined ratio, as adjusted (AYCR): |
|
|
|
|
|
|
|
| |||||
North America AYCR |
| 88.2 |
|
|
| 88.5 |
|
| 0.3 |
| pts | ||
North America Commercial Lines AYCR |
| 85.9 |
|
|
| 84.3 |
|
| (1.6 | ) |
| ||
North America Personal Insurance AYCR |
| 105.3 |
|
|
| 109.4 |
|
| 4.1 |
|
| ||
International AYCR |
| 88.6 |
|
|
| 87.4 |
|
| (1.2 | ) |
| ||
International Commercial Lines AYCR |
| 81.6 |
|
|
| 80.3 |
|
| (1.3 | ) |
| ||
International Personal Insurance AYCR |
| 98.9 |
|
|
| 99.1 |
|
| 0.2 |
|
|
General Insurance
LIFE AND RETIREMENT
| Three Months Ended |
|
| |||||||||||
| December 31, |
|
| |||||||||||
($ in millions, except as indicated) | 2022 | 2023 | Change | |||||||||||
Adjusted pre-tax income | $ | 852 |
|
| $ | 957 |
|
| 12 |
| % | |||
Individual Retirement |
| 463 |
|
|
| 620 |
|
| 34 |
|
| |||
Group Retirement |
| 172 |
|
|
| 179 |
|
| 4 |
|
| |||
Life Insurance |
| 157 |
|
|
| 65 |
|
| (59 | ) |
| |||
Institutional Markets |
| 60 |
|
|
| 93 |
|
| 55 |
|
| |||
|
|
|
|
|
|
|
|
| ||||||
Premiums and fees | $ | 2,861 |
|
| $ | 3,249 |
|
| 14 |
| % | |||
Individual Retirement |
| 241 |
|
|
| 220 |
|
| (9 | ) |
| |||
Group Retirement |
| 99 |
|
|
| 106 |
|
| 7 |
|
| |||
Life Insurance |
| 1,097 |
|
|
| 952 |
|
| (13 | ) |
| |||
Institutional Markets |
| 1,424 |
|
|
| 1,971 |
|
| 38 |
|
| |||
|
|
|
|
|
|
|
|
| ||||||
Premiums and deposits | $ | 8,800 |
|
| $ | 10,585 |
|
| 20 |
| % | |||
Individual Retirement |
| 3,827 |
|
|
| 5,282 |
|
| 38 |
|
| |||
Group Retirement |
| 2,243 |
|
|
| 2,083 |
|
| (7 | ) |
| |||
Life Insurance |
| 1,179 |
|
|
| 1,216 |
|
| 3 |
|
| |||
Institutional Markets |
| 1,551 |
|
|
| 2,004 |
|
| 29 |
|
| |||
|
|
|
|
|
|
|
|
| ||||||
Net flows | $ | (744 | ) |
| $ | (777 | ) |
| (4 | ) | % | |||
Individual Retirement |
| 212 |
|
|
| 772 |
|
| 264 |
|
| |||
Group Retirement |
| (956 | ) |
|
| (1,549 | ) |
| (62 | ) |
| |||
|
|
|
|
|
|
|
|
| ||||||
Net investment income, APTI basis | $ | 2,225 |
|
| $ | 2,566 |
|
| 15 |
| % | |||
Return on adjusted segment common equity |
| 10.0 |
| % |
| 11.5 |
| % | 1.5 |
| pts |
Life and Retirement
OTHER OPERATIONS
|
| Three Months Ended |
|
|
| ||||||
|
| December 31, |
|
|
| ||||||
($ in millions) |
| 2022 |
|
| 2023 |
| Change |
| |||
Corporate and Other | $ | (355 | ) |
| $ | (234 | ) |
| 34 |
| % |
Corebridge, Inc. |
| (111 | ) |
|
| (176 | ) |
| (59 | ) |
|
Consolidation and eliminations - other |
| 15 |
|
|
| 11 |
|
| (27 | ) |
|
Adjusted pre-tax loss | $ | (451 | ) |
| $ | (399 | ) |
| 12 |
| % |
Other Operations
CONFERENCE CALL
AIG will host a conference call tomorrow, Wednesday, February 14, 2024 at 8:30 a.m. ET to review these results. The call is open to the public and can be accessed via a live, listen-only webcast in the Investors section of www.aig.com. A replay will be available after the call at the same location.
Additional supplementary financial data is available in the Investors section at www.aig.com.
Certain statements in this press release and other publicly available documents may include, and members of AIG management may from time to time make and discuss, statements which, to the extent they are not statements of historical or present fact, may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward‑looking statements are intended to provide management’s current expectations or plans for AIG’s future operating and financial performance, based on assumptions currently believed to be valid and accurate. Forward-looking statements are often preceded by, followed by or include words such as “will,” “believe,” “anticipate,” “expect,” “expectations,” “intend,” “plan,” “strategy,” “prospects,” “project,” “anticipate,” “should,” “guidance,” “outlook,” “confident,” “focused on achieving,” “view,” “target,” “goal,” “estimate” and other words of similar meaning in connection with a discussion of future operating or financial performance. These statements may include, among other things, projections, goals and assumptions that relate to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expense reduction efforts, the outcome of contingencies such as legal proceedings, anticipated organizational, business or regulatory changes, such as the separation of the Life and Retirement business from AIG, the effect of catastrophic events, both natural and man-made, and macroeconomic and/or geopolitical events, anticipated dispositions, monetization and/or acquisitions of businesses or assets, the successful integration of acquired businesses, management succession and retention plans, exposure to risk, trends in operations and financial results, and other statements that are not historical facts.
All forward-looking statements involve risks, uncertainties and other factors that may cause AIG’s actual results and financial condition to differ, possibly materially, from the results and financial condition expressed or implied in the forward-looking statements. Factors that could cause AIG’s actual results to differ, possibly materially, from those in specific projections, goals, assumptions and other forward-looking statements include, without limitation:
Forward-looking statements speak only as of the date of this press release, or in the case of any document incorporated by reference, the date of that document. AIG is not under any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in any forward-looking statements is disclosed from time to time in our filings with the SEC.
COMMENT ON REGULATION G AND NON-GAAP FINANCIAL MEASURES
Throughout this press release, including the financial highlights, AIG presents its financial condition and results of operations in the way it believes will be most meaningful and representative of its business results. Some of the measurements AIG uses are “Non-GAAP financial measures” under SEC rules and regulations. GAAP is the acronym for generally accepted accounting principles in the United States. The non-GAAP financial measures AIG presents are listed below and may not be comparable to similarly-named measures reported by other companies. The reconciliations of such measures to the most comparable GAAP measures in accordance with Regulation G are included within the relevant tables attached to this news release or in the Fourth Quarter 2023 Financial Supplement available in the Investors section of AIG’s website, www.aig.com.
Unless otherwise mentioned or unless the context indicates otherwise, we use the terms “AIG,” “we,” “us” and “our” to refer to American International Group, Inc., a Delaware corporation, and its consolidated subsidiaries.
AIG uses the following operating performance measures because AIG believes they enhance the understanding of the underlying profitability of continuing operations and trends of AIG’s business segments. AIG believes they also allow for more meaningful comparisons with AIG’s insurance competitors. When AIG uses these measures, reconciliations to the most comparable GAAP measure are provided on a consolidated basis.
Book value per common share, excluding accumulated other comprehensive income (loss) (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and deferred tax assets (DTA) (Adjusted book value per common share) is used to show the amount of our net worth on a per-common share basis after eliminating items that can fluctuate significantly from period to period, including changes in fair value (1) of AIG’s available for sale securities portfolio, (2) of market risk benefits attributable to our own credit risk and (3) due to discount rates used to measure traditional and limited payment long-duration insurance contracts, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG post deconsolidation of Fortitude Re (Fortitude Re funds withheld assets) since these fair value movements are economically transferred to Fortitude Re. We exclude deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in these book value per common share metrics. Adjusted book value per common share is derived by dividing total AIG common shareholders’ equity, excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted common shareholders’ equity), by total common shares outstanding.
Book Value per Common Share, Excluding Goodwill, Value of Business Acquired (VOBA), Value of Distribution Channel Acquired (VODA), Other Intangible Assets, AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and Deferred Tax Assets (DTA) (Adjusted Tangible Book Value per Common Share) is used to provide more accurate measure of the realizable value of shareholder on a per-common share basis. Adjusted Tangible Book Value per Common Share is derived by dividing Total AIG common shareholders’ equity, excluding intangible assets, AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets, and DTA (Adjusted Tangible Common Shareholders’ Equity), by total common shares outstanding.
AIG Return on Common Equity (ROCE) – Adjusted After-tax Income Excluding AOCI adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and DTA (Adjusted return on common equity) is used to show the rate of return on common shareholders’ equity. We believe this measure is useful to investors because it eliminates items that can fluctuate significantly from period to period, including changes in fair value (1) of AIG’s available for sale securities portfolio, (2) of market risk benefits attributable to our own credit risk and (3) due to discount rates used to measure traditional and limited payment long-duration insurance contracts, foreign currency translation adjustments and U.S. tax attribute deferred tax assets. This measure also eliminates the asymmetrical impact resulting from changes in fair value of our available for sale securities portfolio wherein there is largely no offsetting impact for certain related insurance liabilities. In addition, we adjust for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets since these fair value movements are economically transferred to Fortitude Re. We exclude deferred tax assets representing U.S. tax attributes related to net operating loss carryforwards and foreign tax credits as they have not yet been utilized. Amounts for interim periods are estimates based on projections of full-year attribute utilization. As net operating loss carryforwards and foreign tax credits are utilized, the portion of the DTA utilized is included in Adjusted Return on Common Equity. Adjusted Return on Common Equity is derived by dividing actual or annualized adjusted after-tax income attributable to AIG common shareholders by average Adjusted Common Shareholders’ Equity.
General Insurance and Life and Retirement Adjusted Segment Common Equity is based on segment equity adjusted for the attribution of debt and preferred stock (Segment Common Equity) and is consistent with AIG’s Adjusted Common Shareholders’ Equity definition.
General Insurance and Life and Retirement Return on Adjusted Segment Common Equity – Adjusted After-tax Income (Return on adjusted segment common equity) is used to show the rate of return on Adjusted Segment Common Equity. Return on Adjusted Segment Common Equity is derived by dividing actual or annualized Adjusted After-tax Income by Average Adjusted Segment Common Equity.
Adjusted After-tax Income Attributable to General Insurance and Life and Retirement is derived by subtracting attributed interest expense, income tax expense and attributed dividends on preferred stock from APTI. Attributed debt and the related interest expense and dividends on preferred stock are calculated based on our internal allocation model. Tax expense or benefit is calculated based on an internal attribution methodology that considers among other things the taxing jurisdiction in which the segments conduct business, as well as the deductibility of expenses in those jurisdictions.
Adjusted revenues exclude Net realized gains (losses), income from non-operating litigation settlements (included in Other income for GAAP purposes), changes in fair value of securities used to hedge guaranteed living benefits (included in Net investment income for GAAP purposes) and income from elimination of the International reporting lag. Adjusted revenues is a GAAP measure for our segments.
Adjusted Pre-tax Income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax. This definition is consistent across our segments. These items generally fall into one or more of the following broad categories: legacy matters having no relevance to our current businesses or operating performance; adjustments to enhance transparency to the underlying economics of transactions; and measures that we believe to be common to the industry. APTI is a GAAP measure for our segments. Excluded items include the following:
Adjusted After-tax Income attributable to AIG common shareholders (AATI) is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock, noncontrolling interest on net realized gains (losses), other non-operating expenses and the following tax items from net income attributable to AIG:
See page 15 for the reconciliation of Net income attributable to AIG to Adjusted After-tax Income Attributable to AIG.
Ratios: We, along with most property and casualty insurance companies, use the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. Our ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios.
Accident year loss and Accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year combined ratio, ex-CAT): both the accident year loss and accident year combined ratios, as adjusted, exclude catastrophe losses (CATs) and related reinstatement premiums, prior year development, net of premium adjustments, and the impact of reserve discounting. Natural catastrophelossesare generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. We believe that as adjusted ratios are meaningful measures of our underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management’s control. We also exclude prior year development to provide transparency related to current accident year results.
Underwriting ratios are computed as follows:
Premiums and deposits: includes direct and assumed amounts received and earned on traditional life insurance policies, group benefit policies and life‑contingent payout annuities, as well as deposits received on universal life, investment‑type annuity contracts, Federal Home Loan Bank funding agreements and mutual funds. We believe the measure of premiums and deposits is useful in understanding customer demand for our products, evolving product trends and our sales performance period over period.
Results from discontinued operations are excluded from all of these measures.
American International Group, Inc. (NYSE: AIG) is a leading global insurance organization. AIG provides insurance solutions that help businesses and individuals in approximately 190 countries and jurisdictions protect their assets and manage risks through AIG operations and network partners.
AIG is the marketing name for the worldwide operations of American International Group, Inc. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries and jurisdictions, and coverage is subject to underwriting requirements and actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.
American International Group, Inc. Selected Financial Data and Non-GAAP Reconciliation ($ in millions, except per common share data) | |||||||||||||||||||||||||
Reconciliations of Adjusted Pre-tax and After-tax Income | |||||||||||||||||||||||||
| Three Months Ended December 31, | ||||||||||||||||||||||||
| 2022 |
| 2023 | ||||||||||||||||||||||
|
|
|
| Total Tax |
| Non- |
|
|
|
|
|
| Total Tax | Non- |
|
| |||||||||
|
|
|
| (Benefit) |
| controlling |
| After |
|
|
|
| (Benefits) |
| controlling |
| After | ||||||||
|
| Pre-tax |
| Charge |
| Interests(e) |
| Tax |
|
| Pre-tax |
| Charge |
| Interests(e) |
| Tax | ||||||||
Pre-tax income (loss)/net income (loss), including noncontrolling interests | $ | 756 |
| $ | 209 |
| $ | — |
| $ | 547 |
|
| $ | (1,346 | ) | $ | (873 | ) | $ | — |
| $ | (473 | ) |
Noncontrolling interests |
|
|
|
|
| 5 |
|
| 5 |
|
|
|
|
|
|
| 566 |
|
| 566 |
| ||||
Pre-tax income (loss)/net income attributable to AIG |
| 756 |
|
| 209 |
|
| 5 |
|
| 552 |
|
|
| (1,346 | ) |
| (873 | ) |
| 566 |
|
| 93 |
|
Dividends on preferred stock |
|
|
|
|
|
|
| 7 |
|
|
|
|
|
|
|
|
| 7 |
| ||||||
Net income attributable to AIG common shareholders |
|
|
|
|
|
|
| 545 |
|
|
|
|
|
|
|
|
| 86 |
| ||||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Changes in uncertain tax positions and other tax adjustments |
|
|
| (68 | ) |
| — |
|
| 68 |
|
|
|
|
| (147 | ) |
| — |
|
| 147 |
| ||
Deferred income tax valuation allowance releases(a) |
|
|
| 10 |
|
| — |
|
| (10 | ) |
|
|
|
| 402 |
|
| — |
|
| (402 | ) | ||
Changes in fair value of securities used to hedge guaranteed living benefits |
| (1 | ) |
| — |
|
| — |
|
| (1 | ) |
|
| 4 |
|
| 1 |
|
| — |
|
| 3 |
|
Change in market risk benefit, net(b) |
| (245 | ) |
| (52 | ) |
| — |
|
| (193 | ) |
|
| 486 |
|
| 102 |
|
| — |
|
| 384 |
|
Changes in benefit reserves related to net realized gains (losses) |
| (3 | ) |
| (1 | ) |
| — |
|
| (2 | ) |
|
| 1 |
|
| — |
|
| — |
|
| 1 |
|
Changes in the fair value of equity securities |
| 12 |
|
| 2 |
|
| — |
|
| 10 |
|
|
| 40 |
|
| 8 |
|
| — |
|
| 32 |
|
(Gain) loss on extinguishment of debt |
| 4 |
|
| 1 |
|
| — |
|
| 3 |
|
|
| (58 | ) |
| (12 | ) |
| — |
|
| (46 | ) |
Net investment income on Fortitude Re funds withheld assets |
| (309 | ) |
| (65 | ) |
| — |
|
| (244 | ) |
|
| (543 | ) |
| (114 | ) |
| — |
|
| (429 | ) |
Net realized losses on Fortitude Re funds withheld assets |
| 174 |
|
| 37 |
|
| — |
|
| 137 |
|
|
| (101 | ) |
| (21 | ) |
| — |
|
| (80 | ) |
Net realized gains on Fortitude Re funds withheld embedded derivative |
| 370 |
|
| 78 |
|
| — |
|
| 292 |
|
|
| 2,159 |
|
| 454 |
|
| — |
|
| 1,705 |
|
Net realized losses(c) |
| 1,228 |
|
| 308 |
|
| — |
|
| 920 |
|
|
| 1,473 |
|
| 316 |
|
| — |
|
| 1,157 |
|
Net (gain) loss on divestitures and other |
| 127 |
|
| 26 |
|
| — |
|
| 101 |
|
|
| (501 | ) |
| 277 |
|
| — |
|
| (778 | ) |
Non-operating litigation reserves and settlements |
| — |
|
| — |
|
| — |
|
| — |
|
|
| 1 |
|
| — |
|
| — |
|
| 1 |
|
Unfavorable prior year development and related amortization changes ceded under retroactive reinsurance agreements |
| 46 |
|
| 9 |
|
| — |
|
| 37 |
|
|
| 50 |
|
| 11 |
|
| — |
|
| 39 |
|
Net loss reserve discount (benefit) charge |
| (707 | ) |
| (149 | ) |
| — |
|
| (558 | ) |
|
| 110 |
|
| 23 |
|
| — |
|
| 87 |
|
Pension expense related to a one-time lump sum payment to former employees |
| 60 |
|
| 13 |
|
| — |
|
| 47 |
|
|
| 9 |
|
| 2 |
|
| — |
|
| 7 |
|
Integration and transaction costs associated with acquiring or divesting businesses |
| 58 |
|
| 12 |
|
| — |
|
| 46 |
|
|
| 56 |
|
| 12 |
|
| — |
|
| 44 |
|
Restructuring and other costs |
| 155 |
|
| 35 |
|
| — |
|
| 120 |
|
|
| 151 |
|
| 32 |
|
| — |
|
| 119 |
|
Non-recurring costs related to regulatory or accounting changes |
| 15 |
|
| 3 |
|
| — |
|
| 12 |
|
|
| 4 |
|
| — |
|
| — |
|
| 4 |
|
Net impact from elimination of international reporting lag(d) |
| (127 | ) |
| (27 | ) |
| — |
|
| (100 | ) |
|
| — |
|
| — |
|
| — |
|
| — |
|
Noncontrolling interests(e) |
|
|
|
|
| (177 | ) |
| (177 | ) |
|
|
|
|
|
| (811 | ) |
| (811 | ) | ||||
Adjusted pre-tax income/Adjusted after-tax income attributable to AIG common shareholders | $ | 1,613 |
| $ | 381 |
| $ | (172 | ) | $ | 1,053 |
|
| $ | 1,995 |
| $ | 473 |
| $ | (245 | ) | $ | 1,270 |
|
American International Group, Inc. Selected Financial Data and Non-GAAP Reconciliation (continued) ($ in millions, except per common share data) | |||||||||||||||||||||||||||||||
Reconciliations of Adjusted Pre-tax and After-tax Income (continued) | |||||||||||||||||||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||||||||||||||||
| 2022 |
| 2023 | ||||||||||||||||||||||||||||
|
|
|
| Total Tax |
| Non- |
|
|
|
|
|
| Total Tax |
| Non- |
|
| ||||||||||||||
|
|
|
| (Benefit) |
| controlling |
| After |
|
|
|
| (Benefit) |
| controlling |
| After | ||||||||||||||
|
| Pre-tax |
| Charge |
| Interests(e) |
| Tax |
|
| Pre-tax |
| Charge |
| Interests(e) |
| Tax | ||||||||||||||
Pre-tax income/net income, including noncontrolling interests | $ | 14,299 |
| $ | 3,025 |
| $ | — |
| $ | 11,273 |
|
| $ | 3,858 |
| $ | (20 | ) | $ | — |
| $ | 3,878 |
| ||||||
Noncontrolling interests |
|
|
|
|
| (1,046 | ) |
| (1,046 | ) |
|
|
|
|
|
| (235 | ) |
| (235 | ) | ||||||||||
Pre-tax income/net income attributable to AIG |
| 14,299 |
|
| 3,025 |
|
| (1,046 | ) |
| 10,227 |
|
|
| 3,858 |
|
| (20 | ) |
| (235 | ) |
| 3,643 |
| ||||||
Dividends on preferred stock |
|
|
|
|
|
|
| 29 |
|
|
|
|
|
|
|
|
| 29 |
| ||||||||||||
Net income attributable to AIG common shareholders |
|
|
|
|
|
|
| 10,198 |
|
|
|
|
|
|
|
|
| 3,614 |
| ||||||||||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Changes in uncertain tax positions and other tax adjustments |
|
|
| 22 |
|
| — |
|
| (22 | ) |
|
|
|
| 230 |
|
| — |
|
| (230 | ) | ||||||||
Deferred income tax valuation allowance releases(a) |
|
|
| 25 |
|
| — |
|
| (25 | ) |
|
|
|
| 357 |
|
| — |
|
| (357 | ) | ||||||||
Changes in fair value of securities used to hedge guaranteed living benefits |
| (30 | ) |
| (6 | ) |
| — |
|
| (24 | ) |
|
| 16 |
|
| 3 |
|
| — |
|
| 13 |
| ||||||
Change in market risk benefit, net(b) |
| (958 | ) |
| (202 | ) |
| — |
|
| (756 | ) |
|
| 2 |
|
| — |
|
| — |
|
| 2 |
| ||||||
Changes in benefit reserves related to net realized gains (losses) |
| (14 | ) |
| (3 | ) |
| — |
|
| (11 | ) |
|
| (6 | ) |
| (1 | ) |
| — |
|
| (5 | ) | ||||||
Changes in the fair value of equity securities |
| 53 |
|
| 11 |
|
| — |
|
| 42 |
|
|
| (94 | ) |
| (20 | ) |
| — |
|
| (74 | ) | ||||||
(Gain) loss on extinguishment of debt |
| 303 |
|
| 64 |
|
| — |
|
| 239 |
|
|
| (37 | ) |
| (8 | ) |
| — |
|
| (29 | ) | ||||||
Net investment income on Fortitude Re funds withheld assets |
| (943 | ) |
| (198 | ) |
| — |
|
| (745 | ) |
|
| (1,544 | ) |
| (324 | ) |
| — |
|
| (1,220 | ) | ||||||
Net realized losses on Fortitude Re funds withheld assets |
| 486 |
|
| 102 |
|
| — |
|
| 384 |
|
|
| 295 |
|
| 62 |
|
| — |
|
| 233 |
| ||||||
Net realized (gains) losses on Fortitude Re funds withheld embedded derivative |
| (7,481 | ) |
| (1,571 | ) |
| — |
|
| (5,910 | ) |
|
| 2,007 |
|
| 422 |
|
| — |
|
| 1,585 |
| ||||||
Net realized losses(c) |
| 173 |
|
| 38 |
|
| — |
|
| 135 |
|
|
| 2,496 |
|
| 534 |
|
| — |
|
| 1,962 |
| ||||||
Loss from discontinued operations |
|
|
|
|
|
|
| 1 |
|
|
|
|
|
|
|
|
| — |
| ||||||||||||
Net (gain) loss on divestitures and other |
| 82 |
|
| 17 |
|
| — |
|
| 65 |
|
|
| (643 | ) |
| 247 |
|
| — |
|
| (890 | ) | ||||||
Non-operating litigation reserves and settlements |
| (41 | ) |
| (9 | ) |
| — |
|
| (32 | ) |
|
| 1 |
|
| — |
|
| — |
|
| 1 |
| ||||||
Favorable prior year development and related amortization changes ceded under retroactive reinsurance agreements |
| (160 | ) |
| (34 | ) |
| — |
|
| (126 | ) |
|
| (62 | ) |
| (13 | ) |
| — |
|
| (49 | ) | ||||||
Net loss reserve discount (benefit) charge |
| (703 | ) |
| (148 | ) |
| — |
|
| (555 | ) |
|
| 195 |
|
| 41 |
|
| — |
|
| 154 |
| ||||||
Pension expense related to a one-time lump sum payment to former employees |
| 60 |
|
| 13 |
|
| — |
|
| 47 |
|
|
| 84 |
|
| 18 |
|
| — |
|
| 66 |
| ||||||
Integration and transaction costs associated with acquiring or divesting businesses |
| 194 |
|
| 41 |
|
| — |
|
| 153 |
|
|
| 252 |
|
| 53 |
|
| — |
|
| 199 |
| ||||||
Restructuring and other costs |
| 570 |
|
| 120 |
|
| — |
|
| 450 |
|
|
| 553 |
|
| 116 |
|
| — |
|
| 437 |
| ||||||
Non-recurring costs related to regulatory or accounting changes |
| 37 |
|
| 8 |
|
| — |
|
| 29 |
|
|
| 40 |
|
| 8 |
|
| — |
|
| 32 |
| ||||||
Net impact from elimination of international reporting lag(d) |
| (127 | ) |
| (27 | ) |
| — |
|
| (100 | ) |
|
| (12 | ) |
| (3 | ) |
| — |
|
| (9 | ) | ||||||
Noncontrolling interests(e) |
|
|
|
|
| 599 |
|
| 599 |
|
|
|
|
|
|
| (514 | ) |
| (514 | ) | ||||||||||
Adjusted pre-tax income/Adjusted after-tax income attributable to AIG common shareholders | $ | 5,800 |
| $ | 1,288 |
| $ | (447 | ) | $ | 4,036 |
|
| $ | 7,401 |
| $ | 1,702 |
| $ | (749 | ) | $ | 4,921 |
|
(a) |
| The quarter and year ended December 31, 2023 include a valuation allowance release related to a portion of certain tax attribute carryforwards of AIG's U.S. federal consolidated income tax group, as well as valuation allowance changes in certain foreign jurisdictions. |
(b) |
| Includes realized gains and losses on certain derivative instruments used for non-qualifying (economic) hedging. |
(c) |
| Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets. |
(d) |
| Effective in the quarter ended December 31, 2022, the foreign property and casualty subsidiaries report on a calendar year ending December 31. We determined that the effect of not retroactively applying this change was immaterial to our Consolidated Financial Statements for the current and prior periods. Therefore, we reported the cumulative effect of the change in accounting principle within the Consolidated Statements of Income (Loss) for the year ended December 31, 2022 and did not retrospectively apply the effects of this change to prior periods. |
(e) |
| Includes the portion of equity interest of non-operating income of Corebridge and consolidated investment entities that AIG does not own. |
American International Group, Inc. Selected Financial Data and Non-GAAP Reconciliation (continued) ($ in millions, except per common share data) | |||||||||||||||||||
Summary of Key Financial Metrics |
|
|
|
|
| ||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, |
| ||||||||||||||||
Earnings per common share: | 2022 | 2023 | % Inc. (Dec.) | 2022 | 2023 | % Inc. (Dec.) |
| ||||||||||||
Basic |
|
|
|
|
|
|
|
|
|
| |||||||||
Income from continuing operations | $ | 0.73 | $ | 0.12 | (83.6 | ) | % | $ | 13.10 | $ | 5.02 | (61.7 | ) | % | |||||
Income from discontinued operations |
| — |
| — | NM |
|
| — |
| — | NM |
|
| ||||||
Net income attributable to AIG common shareholders | $ | 0.73 | $ | 0.12 | (83.6 | ) | $ | 13.10 | $ | 5.02 | (61.7 | ) |
| ||||||
Diluted |
|
|
|
|
|
|
|
|
|
| |||||||||
Income from continuing operations |
| 0.72 | $ | 0.12 | (83.3 | ) | $ | 12.94 | $ | 4.98 | (61.5 | ) |
| ||||||
Income from discontinued operations |
| — |
| — | NM |
|
| — |
| — | NM |
|
| ||||||
Net income attributable to AIG common shareholders | $ | 0.72 | $ | 0.12 | (83.3 | ) | $ | 12.94 | $ | 4.98 | (61.5 | ) |
| ||||||
Adjusted after-tax income attributable to AIG common shareholders per diluted share | $ | 1.39 | $ | 1.79 | 28.8 |
| % | $ | 5.12 | $ | 6.79 | 32.6 |
| % | |||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| ||||||||
Basic |
| 745.2 |
| 701.5 |
|
| 778.6 |
| 719.5 |
|
| ||||||||
Diluted |
| 754.9 |
| 708.0 |
|
| 787.9 |
| 725.2 |
|
|
Reconciliation of Book Value per Common Share | ||||||||||||
As of period end: | December 31, 2022 |
| September 30, 2023 |
| December 31, 2023 | |||||||
Total AIG shareholders' equity | $ | 40,970 |
|
| $ | 39,984 |
|
| $ | 45,351 |
| |
Less: Preferred equity |
| 485 |
|
|
| 485 |
|
|
| 485 |
| |
Total AIG common shareholders' equity (a) |
| 40,485 |
|
|
| 39,499 |
|
|
| 44,866 |
| |
Less: Deferred tax assets (DTA)* |
| 4,518 |
|
|
| 3,974 |
|
|
| 4,313 |
| |
Less: Accumulated other comprehensive income (AOCI) |
| (22,616 | ) |
|
| (22,529 | ) |
|
| (14,037 | ) | |
Add: Cumulative unrealized gains and losses related to Fortitude Re Funds withheld assets |
| (2,862 | ) |
|
| (2,973 | ) |
|
| (1,791 | ) | |
Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| (19,754 | ) |
|
| (19,556 | ) |
|
| (12,246 | ) | |
Total adjusted common shareholders' equity (b) | $ | 55,721 |
|
| $ | 55,081 |
|
| $ | 52,799 |
| |
Less: Intangible assets: |
|
|
|
|
| |||||||
Goodwill |
| 3,927 |
|
|
| 3,498 |
|
|
| 3,539 |
| |
Value of business acquired |
| 92 |
|
|
| 16 |
|
|
| 15 |
| |
Value of distribution channel acquired |
| 418 |
|
|
| 149 |
|
|
| 145 |
| |
Other intangibles |
| 286 |
|
|
| 249 |
|
|
| 249 |
| |
Total intangible assets |
| 4,723 |
|
|
| 3,912 |
|
|
| 3,948 |
| |
Total adjusted tangible common shareholders' equity (c) | $ | 50,998 |
|
| $ | 51,169 |
|
| $ | 48,851 |
| |
Total common shares outstanding (d) |
| 734.1 |
|
|
| 704.6 |
|
|
| 688.8 |
|
As of period end: | December 31, 2022 | % Inc. (Dec.) |
| September 30, 2023 | % Inc. (Dec.) |
| December 31, 2023 | |||||||||
Book value per common share (a÷d) | $ | 55.15 | 18.1 | % |
| $ | 56.06 | 16.2 | % |
| $ | 65.14 | ||||
Adjusted book value per common share (b÷d) |
| 75.90 | 1.0 |
|
|
| 78.17 | (1.9 | ) |
|
| 76.65 | ||||
Adjusted tangible book value per common share (c÷d) |
| 69.47 | 2.1 |
|
|
| 72.62 | (2.3 | ) |
|
| 70.92 |
American International Group, Inc. Selected Financial Data and Non-GAAP Reconciliation (continued) ($ in millions, except per common share data) | ||||||||||||||||
Reconciliation of Return on Common Equity | ||||||||||||||||
| Three Months Ended December 31, |
| Twelve Months Ended December 31, |
| ||||||||||||
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
Actual or annualized net income (loss) attributable to AIG common shareholders (a) | $ | 2,180 |
|
| $ | 344 |
|
| $ | 10,198 |
|
| $ | 3,614 |
|
|
Actual or annualized adjusted after-tax income attributable to AIG common shareholders (b) | $ | 4,212 |
|
| $ | 5,080 |
|
| $ | 4,036 |
|
| $ | 4,921 |
|
|
Average AIG Common Shareholders' equity (c) | $ | 39,953 |
|
| $ | 42,183 |
|
| $ | 49,338 |
|
| $ | 41,930 |
|
|
Less: Average DTA* |
| 4,536 |
|
|
| 4,144 |
|
|
| 4,796 |
|
|
| 4,322 |
|
|
Less: Average AOCI |
| (23,369 | ) |
|
| (18,283 | ) |
|
| (13,468 | ) |
|
| (19,499 | ) |
|
Add: Average cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| (2,942 | ) |
|
| (2,382 | ) |
|
| (1,053 | ) |
|
| (2,475 | ) |
|
Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| (20,427 | ) |
|
| (15,901 | ) |
|
| (12,415 | ) |
|
| (17,024 | ) |
|
Average adjusted common shareholders' equity (d) | $ | 55,844 |
|
| $ | 53,940 |
|
| $ | 56,957 |
|
| $ | 54,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
ROCE (a÷c) |
| 5.5 |
| % |
| 0.8 |
| % |
| 20.7 |
| % |
| 8.6 |
| % |
Adjusted return on common equity (b÷d) |
| 7.5 |
| % |
| 9.4 |
| % |
| 7.1 |
| % |
| 9.0 |
| % |
* Represents deferred tax assets only related to U.S. net operating loss and foreign tax credit carryforwards on a U.S. GAAP basis and excludes other balance sheet deferred tax assets and liabilities.
Reconciliation of Net Investment Income | |||||||||||||||
|
| Three Months Ended |
|
| Twelve Months Ended | ||||||||||
|
| December 31, |
|
| December 31, | ||||||||||
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
Net Investment Income per Consolidated Statements of Operations | $ | 3,258 |
|
| $ | 3,932 |
|
| $ | 11,767 |
|
| $ | 14,592 |
|
Changes in fair value of securities used to hedge guaranteed living benefits |
| (14 | ) |
|
| (15 | ) |
|
| (55 | ) |
|
| (55 | ) |
Changes in the fair value of equity securities |
| 12 |
|
|
| 40 |
|
|
| 53 |
|
|
| (94 | ) |
Net investment income on Fortitude Re funds withheld assets |
| (309 | ) |
|
| (543 | ) |
|
| (943 | ) |
|
| (1,544 | ) |
Net realized gains (losses) related to economic hedges and other |
| 54 |
|
|
| 45 |
|
|
| 216 |
|
|
| 196 |
|
Net impact from elimination of International reporting lag |
| (41 | ) |
|
| — |
|
|
| (41 | ) |
|
| (1 | ) |
Total Net Investment Income - APTI Basis | $ | 2,960 |
|
| $ | 3,459 |
|
| $ | 10,997 |
|
| $ | 13,094 |
|
Reconciliation of Net Premiums Written - Comparable Basis |
|
| |||||||||||||||||
| Three Months Ended December 31, 2023 |
| Twelve Months Ended December 31, 2023 | ||||||||||||||||
|
|
|
| North |
|
|
|
|
|
| |||||||||
|
| Global - | Global - | America - | International - |
|
| Global - |
|
| |||||||||
| General | Commercial | Personal | Commercial | Commercial |
| General | Commercial |
| Global | |||||||||
| Insurance | Lines | Insurance | Lines | Lines |
| Insurance | Lines | Lexington | Specialty | |||||||||
Change in net premiums written |
|
|
|
|
|
|
|
|
|
| |||||||||
Increase (decrease) as reported in U.S. dollars | 2.6 | % | (0.3 | ) % | 10.0 | % | (7.1 | ) % | 8.4 | % |
| 4.7 | % | 4.4 | % | 17.1 | % | 8.9 | % |
Foreign exchange effect | (0.5 | ) | (0.9 | ) | 0.5 |
| — |
| (1.9 | ) |
| 1.5 |
| 0.6 |
| (0.1 | ) | 0.3 |
|
Lag elimination impact | (0.9 | ) | (0.6 | ) | (1.5 | ) | — |
| (1.6 | ) |
| 0.4 |
| 0.6 |
| — |
| 0.3 |
|
Validus Re | 3.5 |
| 4.7 |
| — |
| 7.9 |
| 0.8 |
|
| (1.8 | ) | (2.6 | ) | — |
| — |
|
Crop Risk Services | 1.8 |
| 2.5 |
| — |
| 4.3 |
| — |
|
| 1.8 |
| 2.4 |
| — |
| — |
|
Increase (decrease) on comparable basis | 6.5 | % | 5.4 | % | 9.0 | % | 5.1 | % | 5.7 | % |
| 6.6 | % | 5.4 | % | 17.0 | % | 9.5 | % |
American International Group, Inc. Selected Financial Data and Non-GAAP Reconciliation (continued) ($ in millions, except per common share data) | ||||||||||||
Reconciliations of Accident Year Loss and Accident Year Combined Ratios, as Adjusted | ||||||||||||
|
|
|
|
|
|
|
|
| ||||
| Three Months Ended |
| Twelve Months Ended | |||||||||
| December 31, |
| December 31, | |||||||||
|
| 2022 |
| 2023 |
| 2022 |
| 2023 | ||||
Total General Insurance |
|
|
|
|
|
|
|
| ||||
Combined ratio |
| 89.9 |
|
| 89.1 |
|
| 91.9 |
|
| 90.6 |
|
Catastrophe losses and reinstatement premiums |
| (3.8 | ) |
| (2.1 | ) |
| (5.0 | ) |
| (4.3 | ) |
Prior year development, net of reinsurance and prior year premiums |
| 2.3 |
|
| 0.9 |
|
| 1.8 |
|
| 1.4 |
|
Accident year combined ratio, as adjusted |
| 88.4 |
|
| 87.9 |
|
| 88.7 |
|
| 87.7 |
|
|
|
|
|
|
|
|
|
| ||||
North America |
|
|
|
|
|
|
|
| ||||
Combined ratio |
| 86.6 |
|
| 87.9 |
|
|
|
|
| ||
Catastrophe losses and reinstatement premiums |
| (4.2 | ) |
| (2.0 | ) |
|
|
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| 5.8 |
|
| 2.6 |
|
|
|
|
| ||
Accident year combined ratio, as adjusted |
| 88.2 |
|
| 88.5 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||||
North America - Commercial Lines |
|
|
|
|
|
|
|
| ||||
Loss ratio |
| 61.5 |
|
| 61.1 |
|
|
|
|
| ||
Catastrophe losses and reinstatement premiums |
| (4.4 | ) |
| (1.7 | ) |
|
|
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| 5.9 |
|
| 0.9 |
|
|
|
|
| ||
Accident year loss ratio, as adjusted |
| 63.0 |
|
| 60.3 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||||
Combined ratio |
| 84.4 |
|
| 85.1 |
|
|
|
|
| ||
Catastrophe losses and reinstatement premiums |
| (4.4 | ) |
| (1.7 | ) |
|
|
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| 5.9 |
|
| 0.9 |
|
|
|
|
| ||
Accident year combined ratio, as adjusted |
| 85.9 |
|
| 84.3 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||||
North America - Personal Insurance |
|
|
|
|
|
|
|
| ||||
Combined ratio |
| 102.5 |
|
| 101.8 |
|
|
|
|
| ||
Catastrophe losses and reinstatement premiums |
| (2.8 | ) |
| (3.7 | ) |
|
|
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| 5.6 |
|
| 11.3 |
|
|
|
|
| ||
Accident year combined ratio, as adjusted |
| 105.3 |
|
| 109.4 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||||
International |
|
|
|
|
|
|
|
| ||||
Combined ratio |
| 93.2 |
|
| 90.1 |
|
|
|
|
| ||
Catastrophe losses and reinstatement premiums |
| (3.5 | ) |
| (2.2 | ) |
|
|
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| (1.1 | ) |
| (0.5 | ) |
|
|
|
| ||
Accident year combined ratio, as adjusted |
| 88.6 |
|
| 87.4 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||||
International - Commercial Lines |
|
|
|
|
|
|
|
| ||||
Combined ratio |
| 89.4 |
|
| 85.5 |
|
|
|
|
| ||
Catastrophe losses and reinstatement premiums |
| (5.2 | ) |
| (3.0 | ) |
|
|
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| (2.6 | ) |
| (2.2 | ) |
|
|
|
| ||
Accident year combined ratio, as adjusted |
| 81.6 |
|
| 80.3 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||||
International - Personal Insurance |
|
|
|
|
|
|
|
| ||||
Loss ratio |
| 54.8 |
|
| 50.9 |
|
|
|
|
| ||
Catastrophe losses and reinstatement premiums |
| (1.0 | ) |
| (0.6 | ) |
|
|
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| 1.0 |
|
| 2.0 |
|
|
|
|
| ||
Accident year loss ratio, as adjusted |
| 54.8 |
|
| 52.3 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||||
Combined ratio |
| 98.9 |
|
| 97.7 |
|
|
|
|
| ||
Catastrophe losses and reinstatement premiums |
| (1.0 | ) |
| (0.6 | ) |
|
|
|
| ||
Prior year development, net of reinsurance and prior year premiums |
| 1.0 |
|
| 2.0 |
|
|
|
|
| ||
Accident year combined ratio, as adjusted |
| 98.9 |
|
| 99.1 |
|
|
|
|
|
American International Group, Inc. Selected Financial Data and Non-GAAP Reconciliation (continued) ($ in millions, except per common share data) | ||||||||||||||||
Reconciliation of General Insurance Return on Adjusted Segment Common Equity | ||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
| Three Months Ended |
| Twelve Months Ended |
| ||||||||||||
| December 31, |
| December 31, |
| ||||||||||||
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
Adjusted pre-tax income | $ | 1,212 |
|
| $ | 1,437 |
|
| $ | 4,430 |
|
| $ | 5,371 |
|
|
Interest expense on attributed financial debt |
| 131 |
|
|
| 117 |
|
|
| 560 |
|
|
| 506 |
|
|
Adjusted pre-tax income including attributed interest expense |
| 1,081 |
|
|
| 1,320 |
|
|
| 3,870 |
|
|
| 4,865 |
|
|
Income tax expense |
| 291 |
|
|
| 331 |
|
|
| 920 |
|
|
| 1,146 |
|
|
Adjusted after-tax income |
| 790 |
|
|
| 989 |
|
|
| 2,950 |
|
|
| 3,719 |
|
|
Dividends declared on preferred stock |
| 3 |
|
|
| 3 |
|
|
| 12 |
|
|
| 12 |
|
|
Adjusted after-tax income attributable to common shareholders | $ | 787 |
|
| $ | 986 |
|
| $ | 2,938 |
|
| $ | 3,707 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
Ending adjusted segment common equity | $ | 30,328 |
|
| $ | 28,067 |
|
| $ | 30,328 |
|
| $ | 28,067 |
|
|
Average adjusted segment common equity | $ | 29,246 |
|
| $ | 29,319 |
|
| $ | 28,336 |
|
| $ | 29,732 |
|
|
Return on adjusted segment common equity |
| 10.8 |
| % |
| 13.5 |
| % |
| 10.4 |
| % |
| 12.5 |
| % |
|
|
|
|
|
|
|
|
| ||||||||
Total segment shareholder’s equity | $ | 24,310 |
|
| $ | 24,290 |
|
| $ | 24,310 |
|
| $ | 24,290 |
|
|
Less: Preferred equity |
| 212 |
|
|
| 184 |
|
|
| 212 |
|
|
| 184 |
|
|
Total segment common equity |
| 24,098 |
|
|
| 24,106 |
|
|
| 24,098 |
|
|
| 24,106 |
|
|
Less: Accumulated other comprehensive income (AOCI) |
| (6,912 | ) |
|
| (4,534 | ) |
|
| (6,912 | ) |
|
| (4,534 | ) |
|
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| (682 | ) |
|
| (573 | ) |
|
| (682 | ) |
|
| (573 | ) |
|
Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| (6,230 | ) |
|
| (3,961 | ) |
|
| (6,230 | ) |
|
| (3,961 | ) |
|
Total adjusted segment common equity | $ | 30,328 |
|
| $ | 28,067 |
|
| $ | 30,328 |
|
| $ | 28,067 |
|
|
Reconciliation of Life and Retirement Return on Adjusted Segment Common Equity | ||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||
| Three Months Ended |
| Twelve Months Ended |
| ||||||||||||
| December 31, |
| December 31, |
| ||||||||||||
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
Adjusted pre-tax income | $ | 852 |
|
| $ | 957 |
|
| $ | 3,317 |
|
| $ | 3,805 |
|
|
Interest expense on attributed financial debt |
| 110 |
|
|
| 114 |
|
|
| 345 |
|
|
| 459 |
|
|
Adjusted pre-tax income including attributed interest expense |
| 742 |
|
|
| 843 |
|
|
| 2,972 |
|
|
| 3,346 |
|
|
Income tax expense |
| 161 |
|
|
| 155 |
|
|
| 610 |
|
|
| 651 |
|
|
Adjusted after-tax income |
| 581 |
|
|
| 688 |
|
|
| 2,362 |
|
|
| 2,695 |
|
|
Dividends declared on preferred stock |
| 2 |
|
|
| 2 |
|
|
| 8 |
|
|
| 8 |
|
|
Adjusted after-tax income attributable to common shareholders | $ | 579 |
|
| $ | 686 |
|
| $ | 2,354 |
|
| $ | 2,687 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
Ending adjusted segment common equity | $ | 23,179 |
|
| $ | 23,208 |
|
| $ | 23,179 |
|
| $ | 23,208 |
|
|
Average adjusted segment common equity | $ | 23,115 |
|
| $ | 23,912 |
|
| $ | 22,611 |
|
| $ | 23,443 |
|
|
Return on adjusted segment common equity |
| 10.0 |
| % |
| 11.5 |
| % |
| 10.4 |
| % |
| 11.5 |
| % |
|
|
|
|
|
|
|
|
| ||||||||
Total segment shareholder’s equity | $ | 8,606 |
|
| $ | 11,019 |
|
| $ | 8,606 |
|
| $ | 11,019 |
|
|
Less: Preferred equity |
| 164 |
|
|
| 158 |
|
|
| 164 |
|
|
| 158 |
|
|
Total segment common equity |
| 8,442 |
|
|
| 10,861 |
|
|
| 8,442 |
|
|
| 10,861 |
|
|
Less: Accumulated other comprehensive income (AOCI) |
| (16,917 | ) |
|
| (13,565 | ) |
|
| (16,917 | ) |
|
| (13,565 | ) |
|
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| (2,180 | ) |
|
| (1,218 | ) |
|
| (2,180 | ) |
|
| (1,218 | ) |
|
Subtotal: AOCI plus cumulative unrealized gains and losses related to Fortitude Re funds withheld assets |
| (14,737 | ) |
|
| (12,347 | ) |
|
| (14,737 | ) |
|
| (12,347 | ) |
|
Total adjusted segment common equity | $ | 23,179 |
|
| $ | 23,208 |
|
| $ | 23,179 |
|
| $ | 23,208 |
|
|
American International Group, Inc. Selected Financial Data and Non-GAAP Reconciliation (continued) ($ in millions, except per common share data) | ||||||
Reconciliations of Premiums and Deposits | ||||||
|
|
|
|
|
| |
| Three Months Ended | |||||
| December 31, | |||||
|
| 2022 |
|
| 2023 |
|
Individual Retirement: |
|
|
|
|
| |
Premiums | $ | 63 |
| $ | 40 |
|
Deposits |
| 3,764 |
|
| 5,245 |
|
Other |
| — |
|
| (3 | ) |
Premiums and deposits | $ | 3,827 |
| $ | 5,282 |
|
|
|
|
|
|
| |
Group Retirement: |
|
|
|
|
| |
Premiums | $ | 3 |
| $ | 4 |
|
Deposits |
| 2,240 |
|
| 2,079 |
|
Other |
| — |
|
| — |
|
Premiums and deposits | $ | 2,243 |
| $ | 2,083 |
|
|
|
|
|
|
| |
Life Insurance: |
|
|
|
|
| |
Premiums | $ | 701 |
| $ | 581 |
|
Deposits |
| 410 |
|
| 408 |
|
Other |
| 68 |
|
| 227 |
|
Premiums and deposits | $ | 1,179 |
| $ | 1,216 |
|
|
|
|
|
|
| |
Institutional Markets: |
|
|
|
|
| |
Premiums | $ | 1,375 |
| $ | 1,921 |
|
Deposits |
| 169 |
|
| 75 |
|
Other |
| 7 |
|
| 8 |
|
Premiums and deposits | $ | 1,551 |
| $ | 2,004 |
|
|
|
|
|
|
| |
Total Life and Retirement: |
|
|
|
|
| |
Premiums | $ | 2,142 |
| $ | 2,546 |
|
Deposits |
| 6,583 |
|
| 7,807 |
|
Other |
| 75 |
|
| 232 |
|
Premiums and deposits | $ | 8,800 |
| $ | 10,585 |
|
Total Debt and Preferred Stock Leverage | |||||
|
|
|
| ||
| Three Months Ended |
| Three Months Ended | ||
| September 30, 2023 |
| December 31, 2023 | ||
Hybrid - debt securities / Total capital | 3.1 | % |
| 2.8 | % |
Financial debt and debt held for sale / Total capital | 29.8 |
|
| 25.0 |
|
Total debt / Total capital | 32.9 |
|
| 27.8 |
|
Preferred stock / Total capital | 0.8 |
|
| 0.7 |
|
Total debt and preferred stock / Total capital (incl. AOCI) | 33.7 |
|
| 28.5 |
|
AOCI Impact | (7.8 | ) |
| (4.2 | ) |
Total debt and preferred stock / Total capital (ex. AOCI) | 25.9 | % |
| 24.3 | % |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240213876539/en/
Quentin McMillan (Investors): quentin.mcmillan@aig.com Claire Talcott (Media): claire.talcott@aig.com www.aig.com
Source: American International Group, Inc.